Gold News this Week
Here is some important news from this week….
The Swiss National Bank is intervening in the currency market. Gold News reports:
The Swiss National Bank recently announced that they will lower their target rate’s range to 0%-0.25% and flood money markets with Swiss francs, more than doubling bank’s sight deposits, in order to drive down the value of their currency. The SNB does not mince words saying that they…
“consider the Swiss franc to be massively overvalued at present. This current strength of the Swiss franc is threatening the development of the economy and increasing the downside risks to price stability in Switzerland. The SNB will not tolerate a continual tightening of monetary conditions and is therefore taking measures against the strong Swiss franc.”
Whether or not the SNB is able to tame the recent currency strength remains to be seen as their past attempts did little more than create capital losses for the SNB. The value of the Swiss franc has been reaching records highs versus most other currencies, as capital is flying out of the risky European banks and into the perceived safety of Switzerland.
Meanwhile, the other safe haven currency, the Yen has also hit new highs. Not surprisingly, Japan is set to intervene in the currency market as the strength of the Yen is hurting export growth. As we know, Japan is an export driven economy.
Speaking of Asia, the central banks in Thailand and Korea added to their Gold holdings. Although the year isn’t over yet, emerging market nations have already bought double the amount of Gold this year relative to 2010.
Moving westward, the European Central Bank will keep rates “stimulative” at 1.50%. This had if any impact, an extreme negative one on the markets.
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